Market report: Thursday close

LONDON shares climbed to a new 21-month high today as a strong start on Wall Street sparked a late buying spree. The FTSE-100 Index struggled for momentum for much of the day before some hectic dealing saw it close the session 31.9 points higher at 4571.8.

The impetus came from the United States where a number of corporate heavyweights posted strong results, including media group Viacom and foods manufacturer Sarah Lee. It triggered a better outlook for the world's largest economy and calmed nerves over a possible rise in interest rates.

In London, a clutch of blue-chip stocks made gains of more than 2%, with British Airways flying highest with an 8.75p rise to 294.5p.

Brewing group Scottish & Newcastle was also prominent among the risers with a 11.25p increase to 415.25p after pleasing investors with cost cutting news. The group said it was planning to close Newcastle's historic Tyne brewery and move to a new site nearby.

But a disappointing update from Abbey National provided a drag on the Footsie, with shares in the bank down 15p to 420p. The group, which is looking to bounce back from heavy losses seen over the last two years, did little for investor confidence by forecasting a 'moderately weaker' outlook for its core personal financial services division.

Meanwhile, other banking shares recovered losses to end the day in positive territory with Barclays ahead 3.5p at 508p and Lloyds TSB up a penny at 427p.

Wine and spirits group Allied Domecq also fought back to close the session 1.25p stronger at 466p. It said good performances in Spain and the United States had helped it drum up a 4% rise in half yearly trading profits to £337m.

Outside the top flight, struggling retailer WH Smith said its high street shops had delivered an 'unacceptable' performance. The group saw its shares rise 2.5p to 357.5p despite confirming City forecasts of a 29% drop in half yearly profits. Investors were likely to have been more encouraged by the group's decision to allow potential bidder Permira to carry out due diligence.

Steel group Corus was also in focus as it was spared a showdown over moves to appoint Dutch former steel executive Adrianus van der Velden to its board. Corus had been opposed to his nomination by Gallagher Holdings, but Gallagher removed its threat to take Mr van der Velden's nomination to a vote at the company's agm.

While the group took the opportunity at the meeting to tell shareholders that it was back in operating profit, shares weakened as the session wore on to leave Corus 0.75p lower at 39.75p.